SWFT Individual Income Taxes
43rd Edition
ISBN: 9780357391365
Author: YOUNG
Publisher: Cengage
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Jane has written out a check to Manny for $100. Unfortunately, the check was stolen by Stringer Bell who sold it to Freddy for $90. Stringer signed Manny's name even though he is not Manny. Freddy has no idea of the wrongdoing. Freddy presents the check to the bank but Jane and the bank say, "No way".
Can Freddy get the $100? How?
Peter Pan is a self-employed delivery driver. On one delivery trip, Peter
Pan received a $100 ticket for being double parked in violation of city
traffic laws. In an attempt to avoid the ticket, Peter Pan slipped the
parking enforcement officer a $20 bill to "look the other way".
Unfortunately, the parking enforcement officer took the $20, but still
gave Peter Pan the ticket.
How much of the $120 can Peter Pan deduct as a business expense?
Althea writes a check to Handy Dan's Home Repair for $59.75 to cover the cost of having a window repaired in her home and gives the check to
Dan, the owner of Handy Dan's Home Repair. Dan alters the check by changing the amount to $559.75. Dan then takes the check to Home Federal
Savings and Loan, the bank on which the check is drawn, and cashes the check. This, of course, results in an extra $500 being withdrawn from
Althea's account. Home Federal Savings and Loan will be responsible for:
issuing a stop payment order on the check.
debiting Althea's account $559.75, the entire amount of the check.
debiting Althea's account for nothing. Because the check was altered, Althea is not entitled to any reimbursement.
debiting Althea's account $500.
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